Australia's AMP says wealth management focus of AXA merger
Australia's AMP said Sunday its merger with AXA Asia Pacific was focused on growing its wealth management business, creating a "fifth pillar" to compete against the nation's four big banks in that sector.
AMP said it wanted to grow its banking arm, but it was funds management expansion that was driving its 14.6 billion (14.4 billion US) takeover of AXA Asia Pacific Holdings (APH).
"We'd like to over time grow that banking business once securitisation markets recover, but it's fundamentally about taking the major banks on in their wealth management business," AMP chief executive Craig Dunn said.
"When we talk about the fifth pillar, we are talking about a bringing together of both businesses such that in wealth management, we've got a capacity to take on the wealth management businesses of the four major banks," he said in an interview broadcast Sunday.
The government is yet to announce measures to increase competition in financial services in Australia, where the banking scene is dominated by the "big four" -- ANZ, Commonwealth Bank, National Australia Bank (NAB) and Westpac.
Dunn said the recovery from the global financial crisis was still in train, adding that the impact of the slump had reduced competition in banking.
"I don't think there's a magic wand that any government can wave and suddenly cause there to be more banking competition," he told the Australian Broadcasting Corporation.
Under AMP's bid for AXA Asia Pacific Holdings, AMP will integrate the group's Australian and New Zealand businesses with its own and sell the Asia businesses to AXA's French parent company AXA SA.
Dunn said AMP and AXA SA had different goals from the deal which AMP is expected to put to shareholders in early 2011 and on which regulatory approvals are still incomplete.
"We're free to develop our businesses in Asia as we see fit but again we've got a pretty significantly different strategy to the one that exists or will exist in AXA SA which is more about growing life insurance businesses," he said. "Our focus is more on asset management and pensions."
Dunn said AMP was starting to expand into Asia in asset management. "We've now got a small presence in four countries -- Japan, China, India and Singapore -- so that's another longer term growth strategy," he said.
The AMP offer for AXA APH followed its failed play last year which was trumped by a higher offer from major Australian bank NAB. The NAB bid was then dropped in September after being twice rejected by competition regulators.
© 2010 AFP